Let’s break some ground and answer six basic questions about the pre-construction condo, an increasingly popular option for homebuyers in Toronto.
What is a pre-construction condo?
The concept of the pre-construction condo is pretty straight forward: it is a condo that has yet to be built. Developers offer up units for sale before they’re built to help fund the preliminary stages of construction.
The details you’ll be able to find before buying include the location, floorplans, amenities and available square footage(s).
Though you purchase a pre-construction condo similar to how you would an existing condo, there are some key differences to consider.
When are pre-construction condos move-in ready?
Pre-construction projects typically take three to five years to reach completion. The common timeline allows move-in at four years, while foyer facades and landscaping take up the last of the construction schedule.
Availability will depend on the project’s size and demand, but many investors find buying four to five years in advance beneficial for financial planning.
Where can I find pre-construction condos for sale?
A large number of developments permit pre-construction purchases. However, buying pre-construction is most popular in bigger cities, because housing demand and housing scarcity are often greater.
Many homebuyers would rather have a secure place to live four years down the road than begin hunting the housing market that is slim pickings to begin with. You can see the latest pre-construction condo availability by checking out our listings.
Why do people buy pre-construction condos?
There are several benefits to buying pre-con. For example, you save because of how the payments and fees are structured. Buying pre-construction lets you take advantage of discounts that come from buying early, the initial down payment is relatively small, and the home inspection is usually covered by the developer.
You’re also paying for a condo at a price, today, that will only increase over the four years before you take possession. Put another way, the condo you purchase today will be more valuable when you move in.
Beyond these financial benefits, going pre-con offers you more choice than buying an existing condo. You not only get to pick a floorplan from among the newest properties on the market, you also get to select the floor you want to live on, and the direction your windows will face.
Who typically buys condos during pre-construction?
Property investors buy pre-construction because less capital is needed up front. Investors are unconcerned about the design, and they want to buy into a future market that will boost their return. Plus, they can purchase multiple units on the same floor, if desired.
Residents want in on pre-construction for some of the same reasons that investors do: less capital required upfront, a smaller down-payment, and the ability to plan three to five years ahead.
Buy-to-rent investors love a good pre-construction condo too, since new units in newer buildings yield higher rent valuations. Additionally, there will be less to fix from a landlord’s perspective because newer buildings generally require less repair and maintenance.
How do I buy pre-construction?
Buying pre-construction is usually done online, because that’s where you’ll find building conceptions and details. You can sign up to receive details for the condo of your choosing, and you’ll be given access to floorplans, project dates, and important consultation opportunities.